PRICE ISSUES DOG FRITO OLEAN TEST: COST OF P&G FAT SUBSTITUTE MAY IMPEDE ITS FURTHER USE IN SNACKS

Frito-Lay appears to be wrapping up its test of Max, its Olean-based chip line.

After six months, Frito-Lay has discontinued selling the Olean-based versions of Ruffles, Lay's, Doritos and Tostitos in Grand Junction, Colo., and Eau Claire, Wis. But a company spokeswoman said Frito will remain in Cedar Rapids, Iowa, "to learn how consumers respond to Max over a longer period."

She said the marketer has sold 275,000 bags of the chips since April and was "pleased with results."

ANALYST NOT `OVERWHELMED'

However, at least one analyst, Jennifer Solomon of Salomon Bros., said that in a recent visit to the Cedar Rapids market, "We weren't overwhelmed by what we saw."

She noted that the product, normally priced at $4.19, was selling at $5 for two bags.

PaineWebber analyst Manny Goldman said the marketer had been experimenting with price in the three markets, selling the line at a 20%, 40% and 60% premium over its regular chips.

He expects the company to add new test markets next year as soon as Olean's producer, Procter & Gamble Co., boosts its limited production.

It has signed deals with a dozen marketers of other salty snack products.

2 MILLION SAMPLES

P&G has been marketing its No-Fat Pringles crisps in Columbus, Ohio, since September. P&G said it has sold or sampled 2 million servings to date and that sales are ahead of expectations.

A store manager at a Big Bear supermarket in that city said, "It seems to be selling very well."

The marketer also is said to have run in October a new, political-style commercial in Columbus for Olean. The spot, from the Communications Co., Washington, referred to former U.S. Health & Human Services Secretary Louis Sullivan and how he believes Olean is safe for consumption, as stated by the Food & Drug Administration.

Regarding Frit0-Lay's Max, it's believed price is a sticking point. The price of the ingredient forces up the retail price of chips well beyond what consumers are accustomed to paying for their salty snacks.

ORDERING CHIPS BY PHONE

Yet droves of consumers in markets far from the test sites have been ordering the chips via telephone, said Max Dains, food store manager at Hy-Vee in Cedar Rapids.

He added that requests have multiplied substantially since Frito discontinued its other two test markets.

"We've had requests from California, Texas, New Jersey, coast-to-coast," said Mr. Dains, who said the curious are ordering at least four bags at a time at $4.19 each charged to their credit card.

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In this article:

Judann Pollack

Judann Pollack (Judy) is deputy editor of Ad Age. She joined Ad Age in 1985 as editorial assistant, along the way fielding pretty much every position on the masthead, including reporter, Chicago bureau chief, New York bureau chief, features editor, executive editor and managing editor-international.